Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1
Sam Palmisano became CEO of IBM in 2002. He dramatically energized the organization through portfolio changes and a values driven approach to managing the company.
Swot Analysis of "Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1" written by Joseph L. Bower, Sonja Ellingson Hout includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sam Ibm facing as an external strategic factors. Some of the topics covered in Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 case study are - Strategic Management Strategies, Globalization, Leadership, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, geopolitical disruptions, increasing energy prices, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sam Ibm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sam Ibm operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 can be done for the following purposes –
1. Strategic planning using facts provided in Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 case study
2. Improving business portfolio management of Sam Ibm
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sam Ibm
Strengths Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sam Ibm in Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Sam Ibm in the sector have low bargaining power. Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sam Ibm to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Sam Ibm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Sam Ibm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Sam Ibm is one of the leading recruiters in the industry. Managers in the Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Sam Ibm is one of the most innovative firm in sector. Manager in Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Sam Ibm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sam Ibm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Sam Ibm has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Sam Ibm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sam Ibm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Sam Ibm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Sam Ibm has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Sam Ibm is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Sam Ibm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Sam Ibm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sam Ibm has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 are -
No frontier risks strategy
– After analyzing the HBR case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Interest costs
– Compare to the competition, Sam Ibm has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Sam Ibm supply chain. Even after few cautionary changes mentioned in the HBR case study - Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sam Ibm vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Sam Ibm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Sam Ibm even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1, in the dynamic environment Sam Ibm has struggled to respond to the nimble upstart competition. Sam Ibm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Sam Ibm has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sam Ibm 's lucrative customers.
Products dominated business model
– Even though Sam Ibm has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Sam Ibm products
– To increase the profitability and margins on the products, Sam Ibm needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Sam Ibm is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Sam Ibm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sam Ibm to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Sam Ibm, firm in the HBR case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Sam Ibm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sam Ibm can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Sam Ibm to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Sam Ibm to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Sam Ibm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Sam Ibm has opened avenues for new revenue streams for the organization in the industry. This can help Sam Ibm to build a more holistic ecosystem as suggested in the Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 case study. Sam Ibm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sam Ibm can use these opportunities to build new business models that can help the communities that Sam Ibm operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sam Ibm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Sam Ibm can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Manufacturing automation
– Sam Ibm can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sam Ibm is facing challenges because of the dominance of functional experts in the organization. Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sam Ibm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sam Ibm can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Sam Ibm can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Sam Ibm business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Sam Ibm can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Sam Ibm demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Sam Ibm high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Sam Ibm needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Sam Ibm will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1, Sam Ibm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Shortening product life cycle
– it is one of the major threat that Sam Ibm is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sam Ibm can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sam Ibm in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Sam Ibm
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Sam Ibm.
Environmental challenges
– Sam Ibm needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Sam Ibm can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Leaders Who Make a Difference: Sam Palmisano's Smarter IBM: Day 1 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Sam Ibm needs to make to build a sustainable competitive advantage.
